Improving business performance

NSG Environmental

Succession Planning – without it, most SMEs don’t have a future.

Less than half of UK SMEs have any realistic succession planning in place according to a string of surveys carried out in 2013.

Difficulties in recruiting potential executives compared to larger companies was one of the reasons cited for so few SMEs having succession plans in place, and 25% reported the impact was also delaying business growth

The author of one report, Professor David Birchall of Henley Management, warns: “If today's business leaders fail to recruit, nurture and train managers for the future, there is a risk of damage to British business and entrepreneurship that will have far-reaching implications."

One of the problems is that SMEs are often too busy generating new business, meeting the demands of their customers and clients, and keeping up skills and technology training to deal with strategic ‘over the horizon’ issues, and simply don’t have the expertise and resources to address the problem.

Those findings echo the experience of Acorn Coaching and Development who have assisted SMEs in the energy, construction and infrastructure sectors with developing people already within the business, and recruiting new talent to strengthen the businesses.

Two companies involved in the high pressure and demanding nuclear sector illustrate how Acorn assists SMEs in this vital area.

REACT Engineering

Trevor Craig is one of three directors who created REACT Engineering a specialist company delivering strategic, engineering and project management solutions to the challenges faced by the UK nuclear industry in decommissioning, waste management and asset care.

Acorn has supported REACT on succession planning, senior team coaching and development, and talent management to make the most of the graduates and young engineers recruited into the business.

Acorn was also involved in recruiting a new managing director for REACT to help build the core team, and the MD for REACT spin-off company HiDef which specialises in high definition aerial imaging used in the wind energy sector to track bird movements.

Trevor explains: “We recognised that to build on our success and take advantage of emerging opportunities, we had to create a structure for succession planning to develop the best candidates from REACT’s dynamic, highly qualified and experienced engineering team, and bring in new talent to strengthen the team.

“Acorn immediately connected with us, and Brian who worked with us most closely brought with him very useful insights from his previous experience elsewhere. It is extremely helpful to have an outsider’s perspective on a business like ours which is both complex and incredibly customer-focused."

“Acorn has assisted us with recruiting senior people into the team and played a key role in shaping our succession planning. Like many businesses, REACT started with a small group of like-minded people with big ideas, and we have worked hard to build up the business.

“However, taking that business to the next level is an enormous challenge. It is important to ensure the right people with the right skills and strengths are in place, allowing the principals to step back from the day-to-day work and concentrate on strategic concerns.”

The development of young people within REACT is another key area. Like many businesses based in West Cumbria the company struggles to recruit high quality engineers, despite the opportunities presented by its location on Britain’s Energy Coast.

Trevor adds: “We are committed to growing our own talent. That means attracting graduates and young engineers into the business – often capturing their interest before university. But once they have joined us we need to ensure they are coached and trained to embrace management skills, team working and client management capabilities alongside their creativity and technical skills. That’s another area where Acorn has proved immensely useful – broadening their experience and helping them to mature as managers who may lead the company in the future.”

NSG Environmental Ltd

NSG Environmental Ltd, is another specialist in the nuclear decommissioning and waste management sector which has benefited from support provided by Acorn.

Managing Director John Morris, one of three executive directors within the business explains: “We have a hugely talented team within NSG including managers, scientists and engineers and they demonstrate outstanding competence in developing and delivering solutions for our client companies and partners. However, we needed to grow the leaders of the future to ensure our success continues in increasingly competitive markets.”

Further team coaching sessions assisted in the identification of the leadership behaviours and competencies required to meet the short to medium term needs of the business.

A development centre designed to identify talented individuals capable of taking the business forward and demonstrating strategic thinking gave the directors a clearer objective perception of the future talent within the business.

Acorn also worked with the directors to assist them in looking strategically at the business and create a coaching capability to continue development of that future leadership talent and assisting strategic development.

John Morris adds: “It is important to identify those talented middle managers who may make our future leaders; individuals capable of not just delivering our business today but also able to make that leap in strategic thinking to take the business forward.”

Acorn Director Keith Longney comments; “Succession planning and focusing attention on strategic development while maintaining day-to-day performance of the business are two of the biggest challenges facing SMEs, and both REACT and NSG Environmental recognise the need for a more structured approach to sustain its success.

“It is rare for an SME to have the in-house resources to address this vital business need but that is where companies like ourselves can help by providing the tools and experience to deliver what they need.

“Less enlightened SME directors see succession planning simply as a ‘nice to have’, or something they have time to think about in the future. But unless they act – and develop or bring in the expertise they need – many of those companies simply don’t have a future.”